Make sure you are Financially Stable before Quitting your Job

There is probably not a single human being in the world who doesn’t dream. Some of us dream about money, some about love, while some other about food. While it is not impossible to turn dreams into reality, we often let them be, choosing not to work towards them. One dream which a number of us might have is the dream to be their own boss. A dream wherein they want to work for themselves first. Given the fact that a majority of people are in jobs which they might not like, instances of people putting in their papers are increasing. While a few people quit to move to a better company, a few others quit to pursue their dreams. While quitting a job to take a new offer can reduce the financial burden on an individual, quitting to follow your dreams can be taxing. So if you are one of those who feel that the time to move on in life has come, here are a few questions you need to ask about your financial stability.

• Do I have debts which need to be paid even after quitting?

A majority of adults have debts which need to be repaid. If you are one among them it might be a good option to reconsider your decision. Debt can be in multiple forms, be it the repayment of a personal loan, paying your credit card bills, etc. An individual might think that he/she can continue making these payments even after quitting, and while this could be possible in cases where one has taken up another job, doing so while starting something independent can be financially taxing. One smart thing to do is calculate all the liabilities which you have before taking the decision to quit. You could make use of EMI calculator for the same. In cases where you can repay the debt within a few months (provided you continue working), you could postpone the decision to quit and wait until all dues are cleared.

• Do I have an alternate source of income to support me during the initial phase?

Let’s face it. We need money to make money. Starting a new venture is hard, especially when it comes to money matters. If you are the sole breadwinner of your family you might find it even harder to manage. This is a major reason for people to give up on their dreams. However, if you have an alternate source of income during this period, this income can give you the much needed support to follow your dreams. A smart way to ensure that you have an alternate income source is to invest in products which offer periodic returns. You could choose to buy a life insurance policy which pays a certain amount regularly. Alternately, if you have invested in stocks which pay dividends you could be in a position to manage your expenses. One smart way to supplement the income is to invest in a property. You could rent this property and get a steady inflow of money each month. A number of banks offer home loan at affordable interest rates for the same. However, do not forget to compute your EMI obligation towards this home loan before solely relying on the rent.

• Do I have to support anyone financially?

If the answer to this is yes and if you don’t have an alternate source of income the chances of you giving up on your dream are very high. You need to ask yourself what will happen to your family during an emergency. Will you be able to pay the hospital bills if one of them falls ill? A number of us might lose hope of starting our own venture at the mere thought of this, but smart planning can bring you one step closer to your dream. A good way to support your family is to invest in insurance, both health and life. Buying a good health insurance policy can help you take care of medical bills during an emergency. You can also choose to include your entire family in the policy through riders. Additionally, buying a life insurance policy will give you satisfaction, knowing that your family is taken care off even in your absence. However, ensure that you have paid all the premiums towards the policy/have an adequate source of income for the same before taking the plunge.

• Do I have savings I can use?

If the answer to this question is Yes it gives you ammo to follow your dreams. If the answer is No, you might want to reconsider your decision. In case you don’t have savings it will pay you to invest in products like fixed deposits, mutual funds, etc. You can utilise these savings when you finally take the step to start your own venture. It is said that not all dreams come true, but smart financial planning can help you get one step closer to fulfilling yours.